Infographic – All About ICOs and ICO Campaigns =

ICO (Initial Coin Offering), also referred to as an Initial Public Coin Offering, is an unregulated method of raising funds for a new cryptocurrency project. This allows startups to avoid the stress and regulatory constraints they would have suffered from trying to raise money through banks or venture capitalists.

An ICO campaign is the campaign that is used to raise as much money as possible for the crypto project with the Initial Coin Offering. In this campaign, a portion of the cryptocurrencies are sold to the company’s financiers in exchange for fiat or other cryptocurrencies. The most commonly traded crypto is usually Bitcoin. According to Btxchange.io, many cryptocurrencies such as Filecoin, Tezos, and Paragon have had great success raising money for their ICO and are therefore interesting to watch.

How does an ICO campaign work?

When a company wants to start a new cryptocurrency venture and raise funds through an Initial Coin Offering, a white paper is created. This is a document that states the following:

  • What is the company about?
  • What solution would it provide when completed?
  • How much money is needed to start the project?
  • What percentage of the virtual tokens do the founders own?
  • Which cryptocurrencies or currencies are accepted for funding?
  • How long does the ICO campaign last?

Over the course of the campaign, supporters and enthusiasts of the crypto project will be able to purchase tokens that will be distributed with virtual or fiat money. These tokens or crypto coins are like the stock that a company sells to investors in an IPO (Initial Public Offering) transaction.

If, at the end of the campaign, the money raised is not enough for the company, the company returns the money to the backers. This would qualify the ICO as a failed project. But if the money raised is enough, it will be used to start or complete the venture.

Pros and cons of an ICO

There are many arguments for and against ICOs; let’s look at some of them.

Advantages

  • ICOs are open to everyone – unlike an IPO, you don’t have to be an advanced investor to participate. It is open to the public and easy to review.
  • Everyone involved can help shape and influence the cryptocurrency landscape. The democratization of the process allows everyone to be involved in control and decision-making.
  • The tokens are sold at a low price – Startups do not start at exorbitant prices, investors see hope for a high return on investment.
  • Liquidity – This means that the tokens can be traded on secondary markets.

Cons

  • It’s a Risky Business – Unlike an IPO, the uncertainty of ICOs is quite high. There are no guarantees.
  • A large number of ICO investors are enthusiasts – This can be a disadvantage for those who are not versed in the industry.
  • ICOs are not regulated or registered by any regulatory body. This raises the question of who bears the brunt of scam, mismanagement or failure.

Last word of warning

While ICOs have provided a high return on investment for most enthusiasts, you would do well to look before you jump. It is good to read many articles on this website about the world of crypto before venturing into risky investments like this.

Infographic – all explanations in a row

In the world of ICOs a lot is still unclear and that is why we have put together a Dutch infographic in collaboration with Btxchange.io (who created the original version) that gives a nice overview of everything about Initial Coin Offerings.

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